As the Administration mulls over possible trade actions against China, it is important to concede official trade statistics do provide in some sense a misleading picture of US-China bilateral trade — but not misleading in a way such that if corrected bolsters the Administration’s arguments.
Author Archives: Menzie Chinn
The Trade Deficit Is Nearly 15% of GDP (“Alternatively Defined”)!
If we count only the import side and not the export side of re-exports, as some in the Administration have suggested, we might as well go “whole hog” and redefine the trade balance completely: Let’s count imports, but not exports.
Figure 1: The trade balance defined as net exports/GDP (blue), and the trade balance excluding exports (red). Source: GDP advance release for 2016Q4, and author’s calculations.
Utilizing the National Guard to Deport Investigate, Identify, Apprehend, Arrest, and Detain Undocumented Immigrants
[Correction to title: it’s been pointed out that the National Guard will not necessarily be empowered to actually deport individuals; they can only have “authority to investigate, identify, apprehend, arrest, detain and conduct searches”. The actual deportation (transportation to port or border) would presumably be undertaken by other agencies. MDC 2/18 10:51AM Pacific]
What are the fiscal and economic implications?
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Would a Gold Standard Result in Fast Adjustment to Parity?
Judy Shelton argues that “Free trade needs sound money”:
…[T]he time has come to develop a comprehensive approach to international monetary reform compatible with genuine free trade under free-market conditions. If markets are to function properly, money needs to convey accurate price signals; that won’t happen as long as governments can manipulate exchange rates.
This Makes No Sense
Judy Shelton on currency manipulation.
A New Approach to Tackling Chinese Currency Manipulation That I Do Not Understand
From Bloomberg:
President Donald Trump’s administration is considering a new tactic to discourage China from undervaluing its currency that falls short of a direct confrontation…
“Who Will Pay for the Wall?”
That’s the title of a new post written by me, on Econofact. Short answer to the question posed: not likely just the Mexicans…
WaPo: Federal agents conduct immigration enforcement raids in at least six states
From the article:
Officials said the raids targeted known criminals, but they also netted some immigrants without criminal records, an apparent departure from similar enforcement waves during the Obama administration. Last month, Trump substantially broadened the scope of who the Department of Homeland Security can target to include those with minor offenses or no convictions at all.
Exchange Rate Prediction Redux
That’s the title of a new European Central Bank working paper (coauthored with Yin-Wong Cheung (City U HK), Antonio Garcia Pascual (Barclay’s), and Yi Zhang (U. Wisc.)) just released.
Killing Nafta: Making Japan, Germany (and Korea) Great Again…
From Head and Mayer, “Brands in motion: How frictions shape multinational production”, an examination of how the auto industry fares if Nafta is terminated:
In the end-of-NAFTA scenario, depicted in orange in Figure 7, all three members reduce [auto] production.